Energy Performance Contracting (EPC) is a form of ‘creative financing’ for capital improvement which allows funding energy upgrades from cost reductions.
Do you know that despite the large economic energy saving potential in the EU, nowadays very few ESCOs apply EPC to the residential market due to some main barriers (such as high transaction costs and high fragmentation of market) which make a large-scale application of the ESCO EPC model for residential buildings particularly difficult?
In this context, frESCO H2020 project has received funding from the European Union’s Horizon 2020 research and innovation programme under Grant Agreement No 893857 on 1st June 2020 in order to deliver the next generation of EPC under the principle of Pay for Performance and to develop innovative business models for novel energy service bundles for residential consumers by November 2023.
frESCO packages will combine:
- Building retrofitting and investments for the installation of smart equipment (metering, sensing, actuating), together with extended offerings for the installation of distributed generation (PV) and storage (batteries) units;
- Energy efficiency measures, spanning behavioural transformation, targeted guidance towards energy savings, along with more advanced concepts for net metering/ self-consumption maximization through smart automation at both building and local energy community level;
- Flexibility services (with the introduction of storage and, if available, electric vehicles as means for enhancing flexibility);
- Non-energy services (Comfort preservation, Indoor Air-quality, Security, Well-being, Emergency notification services, etc.).
frESCO innovation will be tested and validated through a demonstration campaign in real environment in four representative pilot sites:
- Madrid (Spain): The main goal of the project in Madrid’s pilot is to explore an integrated service package including the installation of collectively owned solar panels (in the building rooftop) and batteries – taking advantage of recent Spanish legislation that finally opened the possibility of shared owned distributed energy assets – with automation and non-energy services. Flexibility through demand response, although not yet possible in Spain, will be studied through simulation.
- Gironde (France): frESCO’s integrated service bundles in the French pilot will mainly focus on the combination of flexibility services (being France the most advanced market in this field) with automation, behavioural shifts in the consumer and non-energy services.
- Island of Krk (Croatia): there, frESCO will explore the business case of integrated energy services including distributed generation, consumption automation and building retrofitting, exploiting the synergies with existing renovation programmes and comparing the impact with old and inefficient buildings in the same locations.
- Thasos Island (Greece): Enhanced EPC services proposed by frESCO will look into maximising the energy savings at the Greek pilot by sharing consumption in different loads and potentially aggregating flexibility for providing further services and maximising the benefits of the infrastructure.
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